A lot of the press coverage on Baltimore has focused on ordinary citizens. The city doesn’t work well for them because they can’t get decent jobs and therefore have to collect various forms of welfare. Sometimes the situation is presented as a zero-sum game (as classic Marxism would require, I think). Because many people in Baltimore are poor there must be a corresponding rich businessperson who is exploiting them (Louis Hyman, a Cornell professor, says that poor people in Baltimore are suffering “economic oppression”; a Hopkins professor says in the NYT that housing and commercial real estate has replaced slavery). The specific businesspeople who are getting rich off the backs of poor Baltimore residents are never identified or interviewed, however, until this Wall Street Journal article. The author is an actual employer in Baltimore and he says that the city doesn’t function well for him either.
So whom does that leave? The city must serve someone’s needs, right? If we subtract private sector employees and private sector employers… that leaves government workers! If they are the ones who can effect change and they are prospering under the current system, why would they try to effect change?
Well, the city is serving some private sector employers VERY well: politically-connected developers and waterfront businesses….
The latest example: a $400 million giveaway in TIFs to the “Harbor Point” development.
The problem in cities like Baltimore is that the non-productive citizens (welfare recipients plus government employees) constitute the majority of the residents and so in a democracy they are free to keep voting themselves higher benefits and wages. The productive citizens can only flee the ever increasing tax burdens (losing their property investments in the city but protecting their future incomes) and indeed this is what has happened: according to the Internal Revenue Service, $125 million in taxable annual income in Baltimore vanished between 2009 and 2010. This creates a downward spiral – whatever productive citizens are left behind have to endure an ever increasing tax burden, not to mention government enforcers who must stay busy in order to keep their jobs and raise revenues for the city and so become ever more vigilant about harassing business about violations for litter, graffiti, etc.